Vedant Fashions IPO: Share allotment announced. What GMP signals now?

Market


Vedant Fashions IPO: Share allotment of the public issue has been announced and allottees are now anxiously waiting for Vedant Fashions IPO listing date, which is most likely on 16th February 2022. Amid falling stock market, Vedant Fashions share price has gone down in the grey market. According to market observers, shares of Vedant Fashions are available at a premium of 2 in grey market today that reflects ‘par listing’ of the public issue worth 3,149.19 crore.

Vedant Fashions IPO GMP

As per the market observers, Vedant Fashions IPO GMP today is 2, which is 3 lower from its yesterday’s grey market premium of 5. Market observers went on to add that the fall in Vedant Fashions IPO GMP can be attributed to the change in secondary market sentiments post-US inflation surge. They said that 100 per cent offer-for-sale has already not gone down well among the bidders that got reflected in tepid subscription status of the public issue. The said that there are still two more trade sessions left before listing of the public offer and predicted ‘par listing’ in case there is trend reversal in the secondary market.

What this GMP mean?

Market observers said that grey market premium is an unofficial data that signals expected listing premium in regard to the public issue. As Vedant Fashions IPO GMP today is 2, it means grey market is expecting this public issue to list around its upper price band of 866. However, Vedant Fashions IPO price band has been fixed at 824 to 866 per equity share.

However, stock market experts advised allottees to remain unmoved by these negative sentiments coming in from the grey market and advised them to stick with the fundamentals of the company.

Highlighting the fundamentals of Vedant Fashions; Abhay Doshi, Founder at UnlistedArena.com said, “Vedant Fashions Limited is a prominent player in organized Indian wedding and celebration wear market. The revenues have largely been affected by the pandemic however, 6MFY22 performance shows recovery amid re-opening and we believe the next six months performance will be significant. On the valuation front, the issue is priced at a multiple of 108 to its earnings and 29.2x price to sales based on annualised FY22 earnings and sales. The valuations look expensive leaving nothing for investors on table. The primary market sentiments have nosedived amid sell off in broader market.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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